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Michael Lewis Riffs on Wall Street, “Flash Boys,” and his First meeting with President Obama

March 25, 2015
•Barbara Dills, Guest Blogger

Above, watch the full conversation with author Michael Lewis.

Bestselling author Michael Lewis recently appeared in Aspen, CO, as the fourth speaker in Aspen Words’ 2015 Winter Words series. He was interviewed by Aspen Words Board President Tom Bernard, one of Lewis’ former colleagues at Salomon Brothers. Lewis is the author of “Flash Boys: A Wall Street Revolt,” “The Big Short: Inside the Doomsday Machine,” and “Moneyball: The Art of Winning an Unfair Game,” among other books. He is currently a contributing editor at Vanity Fair.

Read below for edited excerpts from this onstage conversation. The complete talk is also available on the Aspen Ideas to Go podcast.

Tom Bernard: Michael, you’ve got an unparalleled ability to explain complex business and financial issues in a way the general reader can understand. How do you do it?

Michael Lewis: I had the advantage in the beginning of not being insecure about my own understanding or being insecure about being possibly ridiculed for being simplistic or dumbing it down, or for using simple language where there was a complex language, an insider language, to use.

The second thing is, when I sit down to write, generally I do have as a goal, no matter how complicated the material is, that my mother would understand it. And the funny thing about this is my mother doesn’t actually read my books. But I persist in thinking I want my mother to understand [what I write].

With both “Flash Boys” and “The Big Short,” I think the level of complexity was so high that I did not completely succeed — I don’t think anybody could completely succeed — in explaining a sub-prime collateralized debt obligation to an ordinary person. Even the people on Wall Street who dreamed it up couldn’t explain it. To the extent I’ve been successful explaining the complicated stuff, it is because I trust the intelligence of the reader, and I’m not afraid to be called stupid by a Wall Street insider.

TB: What do you look for in characters to help carry your stories?

ML: I always have to kind of like them because in every case I’m spending so much time with them. If it’s miserable to do, it’s not worth doing. If I’m unhappy in doing the work, the reader’s going to be unhappy in reading about it. So I feel some sympathy at some level with the characters.

But Billy Beane or Jim Clark or Brad Katsuyama or the characters in “The Big Short,” they’re all disruptive. They’re all in some argument with the world around them. And it may not be explicit or open, but it’s there. … And in the act of disruption, they tell you something about the world they’re disrupting. So I don’t look for that, but I can’t deny there’s a pattern there.

It’s people who generate great stories. I don’t generate the story. I’m just the messenger. They generate the story. I wouldn’t succeed as a fiction writer. I am completely dependent on the material in the world… People who generate great stories do tend to be in conflict with the world in some way or another.

Audience question: When you got into the book “Flash Boys,” did you have a motivation that your disclosing some of the things that were going on in high-frequency trading would cause them to be looked at by regulators? Was there an underlying hope that someone would pull back and open the kimono?

ML: When “The Big Short” came out, I started to get calls from senators, lots of senators, basically saying, “You explained to me how our financial system works. Can you come into my office so we can talk some more?” And my response was always, “You’re out of your mind. You are counting on me to explain to you how this all works? I’ve got these characters who know a lot of stuff, but everything I know is in the book, and I don’t know much beyond that.”

That was the first taste I had of being taken really seriously by the political/regulatory process, and the first inkling I got of how clueless it was. And it was really disturbing. So I was aware, because of that book, that a book could start to inform really important people who should already know what was in the book.

I was not oblivious to the fact that “Flash Boys” was going to have the effect it did, although there was no way I could have imagined… I mean it was so explosive when it came out. But why was it explosive? It wasn’t because of me. It was because this guy, this decent Canadian guy, had figured out how it all worked and made it comprehensible. So I knew that if I just connected him with our political/regulatory structure, the effect would be explosive, because he could teach them in a way that was so credible and irrefutable, in a way that I couldn’t. So that’s what happened.

TB: Let’s talk about “Obama’s Way,”your article for Vanity Fair. You were embedded with President Obama for eight months prior to his re-election. You hung out at the White House, on Air Force One, at his weekly basketball game at the FBI building. What was the president thinking when he invited the country’s top satirist into his tent?

ML: It was Quixotic… [It] got driven entirely by Obama. Jay [Carney] liked the idea, but nobody else. They really didn’t like the idea. So I went to the White House to be vetted, basically, by the people around Obama. It felt like a Goldman Sachs interview… it went on for a whole day… [and then] I’m in the Oval Office and Obama is waiting… We sat and talked just like this in those chairs where he and world leaders sit. It was just a chat.

In person, he’s very easy. Normally, when you’re with a political person, someone who’s run for elected office, you generally sense the filter. Two things, actually. You sense they are expert flatterers, that they are looking to get a hook into you some way. They want to feel your approval at the same time. They want that connection. Clinton is, of course, the pathological example. But he’s just the extreme case, right? He’s the best at it. Most of the others want to be Clinton. And the thing about Obama that’s so interesting is he doesn’t want to be Clinton, he really doesn’t. It’s almost like he doesn’t really even care if you like him. But he wants to be real instead… There was no neediness from him. It was just like talking. And it was refreshing…

[Now] I want to write a book about his presidential decision-making… Put the reader in his shoes and use that frame to get across who he is and what it’s like to be him… He knows he’s going to be wrong a lot of the time. How does he function? What does he do? How does he think about it? How does he monitor himself making the decision? The material still feels compelling and fresh.